As the Trump administration considers new tax policies and moves to overhaul the country’s financial education system, education secretary Betsy DeVos is trying to figure out how to make the $2 trillion in annual revenue that is due to be generated by the $1 trillion in spending she has proposed go toward paying for it.
DeVos and her staff have been working on this for months, but their answers are going to be a bit of a shock.
As the Wall Street Journal reported this week, the administration is considering tax reform that would allow corporations to pay taxes at a rate of 35%, while individuals and estates pay 25%, as opposed to the 39.6% that corporations currently pay.
Under the proposal, the government would pay companies that pay their fair share of taxes.
The plan is described as a way to get rid of “job-killing loopholes” in the tax code.
It would also require companies to disclose the income earned from a new federal tax credit, known as the child tax credit.
These credits, which are meant to help families pay for child care, have been the subject of criticism by Democrats, who argue that the credits disproportionately benefit the wealthy.
And while it is still unclear exactly how many people would qualify for the credit under the plan, a Congressional Budget Office analysis last year estimated that the plan would reduce tax revenue by $600 billion over 10 years, about $2,500 per household.
While DeVos has proposed that the credit be eliminated entirely, she has also proposed making it more generous.
Under her plan, families would be able to deduct up to $2.4 million from their taxes, while individuals would get a $2 million deduction for their taxable income, up to a maximum of $5.5 million.
The $2 billion in tax revenue that would be generated would be shared between states, according to the Wall St. Journal, with states like New York and California expected to reap more than $100 billion more than expected under the current tax code and the proposal.
The money would be allocated among schools and communities to help students attend schools and build more communities.
While the White House has yet to release a formal plan for how it would fund the plan or when it will be enacted, it is clear that the administration believes that its tax plan is an important way to improve the financial education infrastructure in the country.
“We are going after the problems with the financial aid system that we have,” DeVos said at a press conference on Wednesday, according the Journal.
“If you can’t have a college education and make sure you are able to keep your job, you can be a successful individual and you can earn a good wage, but the problem with that is that our financial aid, the financial literacy and the financial planning is the most important part of that.”
This would be a major victory for DeVos, who has made the school finance reform a central part of her job.
In addition to her proposal to make college affordable, DeVos has advocated for tax reform and has made it clear that her focus is on making sure that college funding remains a top priority.
DeVos has also called for expanding vocational education to allow for more students to earn degrees.
While she has made some progress on expanding college and vocational education, she still has a long way to go before her proposal becomes law.
As Vox has previously reported, the tax overhaul is likely to face stiff resistance from Republican senators, many of whom have already signaled their support for DeVos’ proposals.
And as Vox’s Adam Davidson has reported, some Republicans have expressed concern about the idea that their constituents might have to pay more for education.
The Senate passed the House version of the tax plan in a bipartisan vote of 248-194 last week, but it faces a long road ahead.
And even if the proposal passes in the Senate, there are still a number of issues that need to be resolved.
For one, the legislation still does not include a refundable tax credit that would provide a way for families to lower their taxes to $3,000 per child under the age of 18.
And a number proposed by the administration could require states to allow school districts to use a standardized testing program that is less rigorous than the ones used by private schools.
Meanwhile, there is also a proposal that would require states and localities to offer vouchers to families who are eligible for food stamps and Medicaid, in an effort to lower costs.
And there are also a number other proposals that could potentially push up the cost of school.
For example, DeVos proposed to require students to be evaluated in a way that would ensure that they did not “learn how to cheat.”
DeVos’ proposal could also affect students who are currently enrolled in public schools, but whose parents are not eligible for the federal government’s food stamp program.